Accounting & the 3 Statements
If a company has a large net DTL on its balance sheet, how should you think about it when valuing the company or in an EV-to-equity bridge?
Model answer
Economically a DTL is taxes deferred, not forgiven — but for a going concern that keeps investing, the reversal is continually pushed out, so it behaves like a near-permanent, interest-free source of…
The full, human-reviewed answer is in the bank.
Sign up free and Daily 10 serves you 10 questions a day from all 1,500+ — or go Pro for unlimited reps.
More from Accounting & the 3 Statements
- What are the three financial statements and what does each show?
- Walk me through how a $10 increase in depreciation flows through the three statements (40% tax).
- How are the three statements linked?
- A company buys $100 of inventory on credit (no cash yet). Walk through the three statements.
- Why can a profitable company still run out of cash?
- What's the difference between cash-based and accrual accounting?